Oddbean

Basically. But Thomas of Aquinas thought that opportunity cost was something bankers thought up to justify charging interest, rather than a real thing. You can't effectively price the cost of something that never happened. You can only estimate it. In fact, you don't know if it ever would have happened. It can be an illusion if choice. "If I had done this, that, and the other, then I would now have X," is a presumption. You actually have no idea.

For instance, bankers will claim that they need to be "made right" for all of their imaginary losses for not buying Treasury bonds, instead. But, if they all stopped lending private people money, what would happen to their *actual* returns on bonds? Schrödingers Returns

That's the point. It's a preference. If you can be content to forgo immediate luxury, you can invest in quality which may bring more comfort longer term. I'm not sure what you don't believe. It doesn't mean that always forgoing pleasure is always wise. You can live a boring life and die with all the plans you worked towards wasted.

I don't believe that I can simply look at the choice someone has made and determine what their thoughts were, while they were making them. I also don't believe that knowing what their thoughts were would even help me, definitively, as humans and their environment are too complex for that. I also don't think humans always know what actually motivated to make a decision, as it's often hindbrain stuff that they aren't consciously aware of. We can only analyze trends and tendencies, and those often turn out to be wrong, or don't hold true indefinitely.

For instance: 10 years ago, I would have said people who take out a loan and go to college, finish, and get a great job are low time-preference. The guy who was like, "this is stupid, gonna just buy Bitcoin", is looking like a genius, now. Was the person who went to college low time-preference? Maybe they just went because their friends were going. Was the person who "bet everything on crypto" prescient or just a gambler? We don't know.

Agree with this. Seven years ago some guys I know were buying bitcoin like crazy, yet couldn’t explain really *why* they were doing it except it seemed like a good gamble, not that it could become some sort of actually currency that wasn’t inflatable. I asked many times, and never got an economic or coherent rational reason back then. Has there been one, I would have learned earlier, but instead I didn’t even hear of Austrian economics until just a few years ago. May have something do with my job of being a sailor for almost twenty years now; at sea you kinda have a single mindset.

And then you have people like Marc Friedrich, who is a macro-economist and was introduced to Bitcoin over the whitepaper and immediately started writing articles and books about it because he was like OMG this is so awesome. 🤣

Yes, but the thing we've been seeing, the last few decades, is that everyone is placing bets. We don't know what the future holds and we can only extrapolate out from the past or guess. Every action carries some risk and reward, often in inverse correlation to each other.

To people who aren't me and don't know me well, I look like the absolute kween of high time-preference behavior. My whole life has just been a series of seemingly crazy decisions, that had everyone staring in mute horror, but that I was making very deliberately and that always worked out well. I simply have an abnormally high risk-tolerance and I don't dither. I just decide and execute. Decide and execute. Decide and execute. I'm like my dad: Shit or get off the pot, bro. But maybe that really is extremely high time-preference behavior, so they're actually right about me. I think strategically (future-oriented), but I execute like my hair is on fire (high time-preference).

It's true. Marriages who manage to successfully unite those two personality types seem to work very well and the spouses do better together than either would, apart. Those who can't get the mix right, dramatically implode. 😬

I've noticed that this drives a lot of people nuts because I'll seem really confident that I've made the right choice about something (like Bitcoin, LOL) and then suddenly waver or sound like a skeptic. I just have this complex mental flowchart for every decision I make, so if someone points out that I forgot a logic gate or an external input three levels up, I'm immediately like, hold up... let's go back and review this from START, again. 🤔 The algorithm is dead. Long live the algorithm.

Yeah. Sudden flurry of activity, like a flock of birds taking flight. Once I've made a decision, it has to be executed immediately or I feel trapped. Drives absolutely everyone around me nuts because it looks like inactivity and then they get hit by a train. Someone less high time-preference would be wealthier and more successful, on average, but have less potential to the upside because they'll eschew risk. And they'll feel less like they have true agency. It's a classic CEO trait, I suppose, and something typical for military officers or inventors: "moving boldly and swiftly" or "acting quickly on asymmetric information".

if ya gotta jump into the cold water no point in going slow once you've done this sort of thing a few times you learn that hesitation is death, always every time you get flutters as you leap you fall

And then, if it works out, they tell you that you "got lucky". No, I just have bigger balls than you do and I'm more inquisitive than you are. You could have made the same choice, but you didn't. The End.

To me, time preference is about the timing of unpleasantness/sacrifice. A high time preference decision is one that defers unpleasantness to a later date, with a pleasant outcome right now. A low time preference decision accepts unpleasantness in the immediate/short term, with the outlook of pleasantness later on. We all make both types of decisions (both large and small), but some people are more prone to one type.

Yes, but I execute immediately because I find inertia incredibly unpleasant. That's why I think I'm a 50/50 mix, at best, rather than someone low time-preference, who focuses on some distant goal and plods toward it, diligently.

I'm not sure I'm that far off. I haven't really been able to learn that about myself yet. I would say my past/current behaviors put me deep into low time preference. > I'm like my dad: Shit or get off the pot, bro. Mine too XD

I'm probably like that because I was raised by a military officer. Or I inherited his personality, or something. Here are our options, we got five minutes to make the correct decision or our ass is grass. WHAT IS THE ANSWER, SOLDIER? My ancestry is a bunch of soldiers and cops and competitive athletes, on both sides. Must rub off. 😅

ah yeah, and engineer/tinkerers haha... my opa built several houses, so did my father, so did my grandfather, he was also a mathematics teacher and was grumpy with me for my dad not pushing me to get into computers more (and he did eventually get a computer and i was a pig for it of course)